Bills That Cover GSP, MTB, Section 301 Exclusions and Uyghur Forced Labor Move to Conference

The China package passed by the Senate -- which includes instructions to reopen Section 301 tariff exclusion applications, and a renewal of both the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill -- will go to a conference committee to reconcile the Senate bill with various pieces of House legislation, one of which changes the burden of proof on goods from Xinjiang. None of the House bills touches on tariffs, and none offers funding for chipmakers, a centerpiece of the Senate bill. Senate Majority Leader Chuck Schumer, D-N.Y. had earlier planned to attach the China package to the must-past National Defense Authorization Act, but after Republican opposition, they decided this was a better way to get the House-Senate talks going.

"Working with President [Joe] Biden, the House and Senate have been crafting bipartisan legislation to bolster American manufacturing, fix our supply chains, and invest in the next generation of cutting-edge technology research. While there are many areas of agreement on these legislative proposals between the two chambers, there are still a number of important unresolved issues," Schumer and House Speaker Nancy Pelosi, D-Calif., said in a joint statement announcing the decision to go to conference immediately.

House Ways and Means Chairman Richard Neal, D-Mass., told International Trade Today in a brief hallway interview that "we would be looking for a path" to middle ground between the Trade Act renewal of GSP and MTB and Trade Subcommittee Chairman Earl Blumenauer's (D-Ore.) proposals to renew GSP and MTB. The House bills have not progressed through committee; the Senate bill got 91 votes.

The two versions of GSP are quite similar, though the House version would renew the program through the end of 2024, not the beginning of 2027, and it would add more stringent environmental protection to the list of eligibility requirements. It also calls for an International Trade Commission report on the rules of origin in GSP and utilization rates for all countries and for least-developed countries, and on how the rules of origin prevent transshipment of products from non-beneficiary countries.

The products covered by MTB vary only slightly between the two chambers. However, Blumenauer wants future MTB lists to be narrower. MTB is described as an aid to manufacturers, but it also eliminates tariffs on a number of consumer products, including scissors, leather belts, certain shoes, electric rice cookers, certain portable stoves, drip coffee makers, leather basketballs, table saws, certain sports rackets, swim goggles, plastic pet carriers, aquarium plastic plants, nail clippers, tweezers, curtain hardware, steam irons, and certain microwave ovens.

The ranking Republican on Ways and Means, Rep. Kevin Brady, R-Texas. told International Trade Today in a hallway interview that he doesn't know if he will be on the conference committee, as the news was too new for him to have had time to talk to Minority Leader Kevin McCarthy, R-Calif. However, either way, he said he hopes the bipartisan, bicameral negotiations of the conference committee will create "an opportunity for us to finish these off before the end of the year. I think what we all know is, until this reconciliation issue is resolved, it's really been difficult to get the time for discussions in a bipartisan way on these. It's been frustrating. Any avenue we have to have those discussions is going to be helpful." The reconciliation issue Brady referred to is the struggle to pass the Build Back Better bill, an environmental and social spending bill, in both the House and Senate, through bridging the ideological spectrum in the Democratic party.

Brady said Republican and Democratic trade staffers have had limited discussions so far. "I am convinced that Chairman Neal wants to get those bills done and done in a bipartisan way," though he cautioned, "I don't want to get too optimistic about it."

The top Republican on the trade subcommittee, Vern Buchanan, said in a brief hallway interview that "I feel like this is something that should've been done, we feel, six months ago," but that he hopes the conference committee will be a way to get the legislation through.

The U.S.Chamber of Commerce said Nov. 17 that it wants GSP and MTB passed before the end of the year, and that the added tariffs for manufacturers who had benefited from MTB is especially hurting smaller companies. On GSP, the Chamber's chief policy officer Neil Bradley wrote: "We understand Members are exploring refinements to these criteria. However, if these revisions lead foreign governments to conclude GSP’s compliance burdens outweigh its economic benefits, it would undermine the program’s viability as a tool to foster trade-based economic development while also failing to advance the new criteria’s goals. We encourage lawmakers and leadership to work together on any new GSP eligibility criteria under consideration and reach a balanced approach that will allow the program to be reauthorized this year."

The Senate version of the Uyghur Forced Labor Prevention Act, which importers prefer, because it would create a safe harbor from the rebuttable presumption, was not part of its China package. However, since the House Foreign Affairs Committee did include it in their bill, the conference committee will offer an opportunity to reconcile the two chambers' approach to how to handle goods imported with Xinjiang-produced content.